Effect of AI adoption on the organizational performance of insurance companies in Kenya

Abstract

In the current dynamic and volatile business environment, many organizations struggle with outdated systems, inefficient processes, and inability to meet customer demands swiftly (Kendall, 2019). Most firms continue to face declining productivity due to reliance on manual processes and outdated machinery. Such inefficiencies not only impact operational costs but also hinder adaptability to market changes, fostering a pressing need for innovative solutions. As firms grapple with these challenges, technology adoption thus emerges as a pivotal strategy. Technologies such as Artificial Intelligence (AI) offer transformative potential by automating routine tasks, enhancing decision-making capabilities, and improving overall operational efficiency. Johnson (2019) illustrates how AI-driven predictive analytics can optimize supply chain management, reducing inventory costs and enhancing responsiveness to customer demands. Empirical evidence underscores the positive impact of AI adoption on firm performance across various sectors. Lee and Kim (2022) found that financial institutions integrating AI into customer service operations experienced higher customer satisfaction levels and operational efficiencies.